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telco operators at the heart of the cloud computing revolution

This is the third and final part in a series of three blog posts dedicated to my interview of Ovum’s Laurent Lachal, a trained historian and technology enthusiast who has been an analyst for the English firm Ovum for 20 years. Lachal's view of the cloud computing scene is driven by insight and a clear understanding of the evolution of this new discipline, which is not just technological, but also encompasses a very strong cultural shift for enterprises that embrace it.

This interview is divided into three parts: part number one describes Lachal's vision of the cloud computing market, part two is dedicated to the two pillars of the cloud computing cultural shift i.e. empowerment and convergence, and lastly, Laurent Lachal will focus on the increasing significance of telecoms providers in that market and how they are playing an increasingly important role, namely in providing infrastructure for the cloud (IaaS).

will telcos be cloud computing contenders?

Telcos already are players of the cloud computing scene because, as part of the convergence of the ICT market, most of them have had ICT ambitions in the past; these ambitions predate cloud even though cloud is an accelerator. Cloud is indeed a good way for Telecom providers to “up their game” at that level and it is a good way for them to move from their comfort zone of infrastructure level to the business level as part of their effort to help enterprises in their journey to the cloud computing; and that journey is actually a business transition as much as it is a technological transition. From that point of view, cloud computing is a driver for most Telcos, and it is a challenge too.

Cloud computing is different from what Telcos did before in a sense that they are moving from being integrators, providers of something which is fairly static, and evolving over a very long period, to being a provider or developer of services that are evolving much faster, even at infrastructure level. This notion of infrastructure is different in the cloud context from the Telecom context; network infrastructure is different.

the software-centric network

What is interesting with cloud computing acceleration and convergence is that the notion of infrastructure is being completely reinvented by becoming increasingly software-centric. Now, we've been talking about software-centric networks for the best part of the past 15 years, but it had never quite happened. Now, this is happening and very fast indeed; not in the bottom-up way, at network level, but much more top-down through things like Infrastructure as a Service (IaaS) and OpenStack, VMware, etc. and that's where the many challenges of Telecoms are, when they need “to keep up with the software Joneses”; because, the network is their heartland, and all of a sudden, a lot of new people who had nothing to do with networks barely 5 years ago, are entering the core realm of network provision and are “moving all the furniture”. Basically, they are even bringing a “new type of furniture” and not just discarding the old one but leaving incumbents with a challenge of keeping up and coming up with their own design.

But it's not just about the network; it's about the data centre too, so that it's about software-defined networks, connected to software-defined storage, connected to software-defined computers, connected to applications, connected to management… and that makes a fairly complicated situation.

reinventing oneself

We are in fact moving from a landscape whereby infrastructure was fairly contained to a particular area and wasn't evolving too much, to a context in which everything is converging with everything else and changing very fast. The skill sets that telecom providers have, which are the skill sets of the network level integration, are also changing, and telcos really need to reinvent themselves, not just at technology level but also at skill set and culture level.

If you want to survive in the cloud-centric world, you have to become API-centric too. Salesforce.com had it from the start; and when they launched their offering, they made it immediately available through an API too. So it's about reinventing your services so that they are consumable through APIs. This notion of reinventing IT around API services, as a concept, is once again very old; but its implementation is relatively new. And it is as much a technological issue as it is a business issue.

In 2008, when cloud computing was launched, Ovum carried out a survey and asked respondents which type of vendors they were expecting to get cloud computing from? Telecom providers, at that time, were at the very end of that list.

In the past 5 years, I've seen them creep up and up. One thing is certain: telecom providers are certainly intent not to miss the cloud computing bandwagon and they are doing their “damnedest best” to be part of it. For that simple reason, they will play a much bigger role and they will have an ever increasing influence on the market in the future. Will they grow into movers and shakers however? I’m not certain. But they will definitely be key players.

who are the key cloud players in the telco sector?

From my point of view they are the usual suspects: NTT, AT&T, BT, Orange and Verizon as well as Telefonica; all the big players. To be honest, I'm not a Telecom specialist, I am a cloud specialist, so I'm less on firm ground when it comes to analysing the telecoms markets but what we are seeing from the outside of this market is that all the big players are having big ambitions and a lot of projects.

I am going to the Orange Business Services analyst day next week** and I went to the one last year, and last year I indeed realised the depth and breadth of the Orange Business Services efforts in that area. Obviously, like everybody else sometimes, the ambitions are slightly ahead of the achievements, but a lot of efforts are being made to be not just able to deliver the service but to reorganise the company entirely. This is what Orange Business Services is doing; and what I keep on saying is that telecom providers need to go through that cultural revolution just like them.

In the past 10 years, when cloud started, all vendors went through the pain of becoming cloud service providers. And they are all still going through that pain today. People have this impression that you're either terribly successful, or you're in the doldrums, that you are a loser. This isn’t true. The reality is less black and white, for there is a lot of mixture of success and failure, and telecom providers are in this middle area. Some of them have some success but also quite a few areas in which they need to “up their game” and to get better. Yet, I was impressed with Orange Business Services and the way that the company was saying that it really needed to change and reorganise; not just with regard to selling new things in new markets, but turning around and finding the right way of doing it. This is not all; the cloud ecosystem is one of the most important things as well. You need to partner and I think it is as important to figure out what are your strengths as it is important not to do certain things and find out how you can rely on 3rd party. Orange seems to have that vision right.